VNTR Capital News July 16th, 2022 - News, Events, VC Reads
Hello friends,
Happy Saturday! Have a great weekend ahead!
Scroll down to view Venture Capital news, upcoming VC-related events, and VC news/reads.
VNTR CAPITAL COMMUNITY NEWS
We have exciting progress at VNTR Capital, we are launching VC Village, a residential community in Carvoeiro, South Portugal, which is scheduled to open by December 2022.
VC Village will be a gated community for international investors and entrepreneurs who wish to live and work in a top European destination through property ownership or rental. Villa buyers will qualify for Golden Visa residency in Portugal and Visa-Free travel within the Schengen zone and will qualify for permanent residency or citizenship after 5 years. With only a 7-day stay requirement in the first year and a 14-day stay requirement for each subsequent two years, villa owners will have the option to rent their properties as managed vacation rentals.
VC Village will consist of 56 semi-detached, fully-furnished villas with three bedrooms, two bathrooms, a private backyard, a two-car parking space, a village clubhouse, pool, and other recreational areas. Situated near beautiful beaches, top golf courses, and a picturesque town, residents will have access to an abundance of outdoor activities.
VNTR Capital is in the process of establishing its European headquarters in Portugal. Since 2016, investment in the startup scene in Portugal has grown 30% per year, twice the average of the rest of Europe. Portugal’s exceptional quality of life and low cost of living, combined with programs supporting digital nomads, startups, and investors, have made Portugal one of Europe’s most attractive tech hubs. VC Village is our turnkey solution for extending these benefits to our global community of investors, entrepreneurs, and partners. Additionally, VC Village will host social events, seminars, retreats, and conferences.
Pre-sales of residencies are now open — Applicants can reserve their villa on a first-come basis with a 50% fully-refundable deposit.
To learn more or to apply to become a resident, please visit: www.vntr.vc/village.
As we mention in the previous newsletter, we are one month away from VNTR Capital Summer Camp (retreat) in Algarve, Portugal, from Aug 15 to 19, 2022. Join us to travel together with other active investors, explore the region, and enjoy the various unique experiences. You can review the planned program and RSVP at https://www.vntr.vc/camp.
Thank you, CoinsPaid, Vauban, and TWO12, for the support of our events.
Here is the schedule of our online and offline events:
additional events will be scheduled - VC Expert session, August Growth Roundtable, and Investment Committee.
Many of you asked what the difference is between all the events we organize for the VC community. Here you go:
Investment Committee - an online event where we invite referred startups to present to our community of investors and answer questions regarding their growth plans and current rounds
VC Expert Session - an online event where we invite an expert or top VC/angel to share their experience and insights that will help investors to be more efficient or better investors
Growth Roundtable - an online event where we invite our global community members to connect, learn about each other, and share their challenges to get peer support from others. Run in a format of a mastermind where all attendees have a few minutes to talk.
VC Breakfast/Lunch/Dinner - an offline event for up to 30 attendees where investors connect and learn about each other in a roundtable format. Many new connections and collaborations formed right after the breakfast.
VC Camp - 4-7 days retreat/trip with other active investors to explore new regions, adventure, bond, and create new friendships.
Want to co-host VC-related events, partner, or sponsor, please respond to this email or Telegram @byuric to discuss collaboration opportunities.
RSVP to Upcoming VNTR Capital Events
The VNTR Capital Investors Community is growing and has 230+ vetted active investors as members.
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UPCOMING VC EVENTS
July 19-20 - Venture Summit West, Silicon Valley
July 20-21 - Impact Capitalism Summit, Nantucket, USA
July 20-22 - FinTech Festival India, New Delhi, India
July 25-29 - Web3 Growth Summit, Virtual
July 27-29 - Blockchain Economy Istanbul Summit
Aug 5 - LetsIgnite, Bengaluru, India
Aug 15-19 - VNTR Capital Camp, Algarve, Portugal
Aug 22-25 - AIBC Balkans, Belgrade, Serbia
Aug 24-26 - Startup Day 2022, Tartu, Estonia
Sep 6-7 - Pirate Summit, Cologne, Germany
Sep 7-8 - YC Demo Day Summer 2022
Sep 6-11 - XPO.CRYPTO, Medellín, Columbia
Sep 12-13 - MetaWeek 2022, Dubai, UAE
Sep 11-14 - NEARCON, Lisbon, Portugal
Sep 13 - VNTR Capital Breakfast, Dubai UAE
Sep 26-Oct 2 - Asia Crypto Week, Singapore
Sep 26 - 29 - Oslo Innovation Week, Oslo, Norway
Sep 28 - VNTR Capital Breakfast, Singapore
Sep 28-29 - Token2049, Singapore
Oct 8-14 - Wow Summit, Dubai, UAE
Oct 11-13 - Take Off Istanbul, Turkey
Oct 5-6 - Sifted Summit, London, UK
Oct 18-20 - TechCrunch Disrupt, San Francisco, USA
Oct 21-22 - Wolves Summit, Vienna, Austria
Nov 1-4 - Web Summit, Lisbon, Portugal
Nov 1-3 - Wow Summit, Lisbon, Portugal
Nov 9-10 - Token2049, London, UK
Nov 14-18 - AIBC Europe, Malta
Nov 15 - VNTR Capital Breakfast Malta
Nov 17-18 - SLUSH 202, Helsinki, Finland
Nov 23-24 - Next Block Expo, Berlin, Germany
Dec 6-7 - NOAH Zurich 2022, Switzerlan
Want to submit VC-related events, please respond to this email or Telegram @byuric
Follow us on Social media: Instagram, LinkedIn, Facebook, and Twitter.
Check out VNTR Capital upcoming events
VC READS
Analysis: Tech Layoffs Are Accelerating
Tech layoffs have accelerated as the year has progressed. June was the most active month for tech layoffs so far this year, with at least 75 reports of U.S.-based tech companies initiating layoffs, according to a Crunchbase News analysis of aggregated layoff data. At least 143 U.S. tech companies have laid off more than 24,000 people so far this year, and it’s unclear when the cuts will slow down. Tech and tech-adjacent companies have been going through layoffs all year, but it wasn’t until late spring that the cuts really picked up. In January, for example, there were only reports of three companies laying off employees: insurtech company Root Insurance, beauty brand Glossier, and fitness company Beachbody. February followed a similar pace, with just four reports of U.S. tech companies initiating layoffs. That included high-profile “pandemic winners” like virtual events platform Hopin and connected fitness company Peloton.
Crypto's Decline Drags Down Venture Capital Funding
New data has shown that funding for private crypto companies is down, with startups feeling the effect of the economic factors souring digital currencies, public stocks, and venture capital. A report from Bloomberg on Tuesday (July 12) said that the hype around the sector had made it seem as if economic troubles couldn’t touch it. Crypto-related startups had around $9.85 billion in venture funds from the first quarter, but that was largely because of how long it takes to finalize venture capital deals. Robert Le, PitchBook FinTech analyst, said the deals had been in process in November and December, though the market had begun slowing down by then.
However, Bloomberg reported that the second quarter better reflects the current situation. There was $6.76 billion poured into crypto companies by venture capitalists for the three months ending in June, the lowest level in a year. This was a 31% drop from the prior quarter. Le attributed this to hesitation to close deals. David Pakman, a managing partner with crypto VC firm CoinFund, expect more layoffs and lower valuations. “What you’re seeing now is seed valuations are down about 20%, Series A valuations are down about 50%, and then Series B and beyond are down about 70%,” Pakman said.
Even As Asia Venture Market Drops, Tiger is Still On The Prowl
The Asia venture market declined in the first half of this year and several well-known investors seemed to slow their cadence. However, Tiger Global was not one of those firms that lessened its pace. The prolific investor, which has taken stakes in companies such as credit card issuer Brex, creator platform Patreon and connected fitness company Peloton, completed 72 deals in Asia in the first half of the year, according to Crunchbase data. That led all firms and represents a 76% increase from H2 2021—and a whopping 167% from only 27 in H1 of last year. Those numbers are impressive considering the Asia venture market’s decline. In the first half of this year, $62.7 billion was invested, a 16% decline from the first half of 2021 and a 37% dip from the second half of the year. Tiger wasn’t the only investor to see potential in the world’s largest continent. Sequoia Capital China, Sequoia Capital India, and Global Founders Capital all completed more than 40 deals in the first half of the year.
India-focused VC & PE funds raise record $14.1 bn in H1CY22
The year 2022 saw a record number of India-focused venture capital (VC) and private equity (PE) funds raising fresh funding for investing in various tech startups in the country, outpacing all previous year records. This is despite a slump in VC and PE rounds and high inflationary pressures. India-focused VC funds raised a whopping $14.1 billion in capital to be deployed in startups in the first half of 2022, according to a report published by Silicon Valley Bank. This is more than a 3X growth compared with last year when VC funds raised only $4.2 billion in capital for Indian startups. The tech-based commercial lender also said in its report that around 76 new funds were launched in the country this year, compared with just 28 in the previous year. Some of the notable include Sequoia India’s $825-million growth fund, Elevation Capital’s Fund VIII worth $670 million, Accel India’s sixth fund worth $550 million, and many others.
Austin quarterly VC deals dip amid the nationwide slowdown
Venture capital deployment in the Austin metro declined in the second quarter of 2022, mirroring national trends. Why it matters: Startups rely on outside capital to grow, and the pandemic marked a boom for fundraising at all stages. But with the broader market heading toward bear territory, the money could be less abundant.
Q2 European Startup Funding Drops 38% From A Year Earlier
European startup investment in the second quarter dropped $14 billion from its peak as venture capital moved downstream. Funding to European startups across all stages reached $23.7 billion last quarter—down 38% from the peak of $38 billion a year earlier, Crunchbase data shows. Much of that decline in funding was to late-stage and technology growth stage startups, which fell by $13 billion. Earlier funding stages, while still down year over year, were less dramatically impacted. It’s worth keeping in mind that 2022 numbers are coming off record highs. Despite the year-over-year drop, European startup funding in the most recent quarter was still $10 billion or higher than each quarter in 2020—even topping that year’s record fourth quarter, when funding totaled $13 billion.
VC Due Diligence Returns—With a Vengeance
After a year of rushed negotiations and skimpy background checks, VC firms are spending more time on due diligence and sometimes walking away from deals.
Q&A: Former Renaissance quant David Magerman on how VCs can use data
After two decades inside Renaissance Technologies, the legendary quantitative hedge fund founded by James Simons, David Magerman was ready for something different. His chance came after a public falling out with Robert Mercer, co-CEO of Renaissance at that time, which left Magerman without a job. Fast forward five years and Magerman co-leads Differential Ventures, a VC firm that invests in enterprise data startups and is raising its second fund with a $60 million target. In the course of that journey, Magerman has developed a theory on when quantitative methods can work in VC and—as is often the case—when they can’t. PitchBook recently spoke with Magerman to hear how investors should be thinking about the limits and opportunities of using data-driven strategies in VC.
Gen Z actually hates working from home
A few months ago, when a San Francisco tech company told its employees that they could work from anywhere they'd like — indefinitely — most of them were ecstatic. But not Jessica, a 25-year-old software engineer. She missed the old, pre-pandemic office: the camaraderie, the energy, and the constant chatter around her. She tried coming in once or twice a week, only to feel like she was sitting in an empty warehouse — nodding from a distance at the few coworkers she would see scattered throughout rows of unoccupied desks. So she did something unexpected in response to her employer's work-wherever-you-want policy: She quit. Now she works at a startup that requires every team to get together in the office at least once a week.
Forecasting a Return to Venture Normalcy
The return of pre-pandemic VC performance?
The prospects of every startup change monthly. However, one observed phenomenon of early-stage investing is that startups doing well are more likely to give you updates—and startups doing poorly are less likely to give you updates.
This means a month with low activity (i.e., changes in price per share because of financings or exits) but many positive updates, and a month with high activity but fewer positive updates might reflect the same underlying state of startup health. In the former case, we just didn’t hear about the negative activity.
'Race to zero': Buy now, pay later suffers under widespread reset
Once a darling of the VC industry, consumer-focused buy now, pay later companies are facing shrinking investor interest as macroeconomic conditions threaten their business models. Klarna, once Europe's most valuable VC-backed company, has confirmed an 85% valuation cut from $45.6 billion to just $6.7 billion following an $800 million round that included investors such as Sequoia, Silver Lake, and the Canada Pension Plan Investment Board. Klarna blamed wider market conditions for the drop, with Sequoia partner Michael Moritz commenting in a statement that the cut is "entirely due to investors suddenly voting in the opposite manner to the way they voted for the past few years." But Klarna's massive haircut is also indicative of the challenges facing the BNPL space. Public companies like US-based Affirm and Australia's Zip have seen their share prices plummet—over 77% and 89% respectively year to date.
Celsius, one of crypto’s biggest lenders, files for bankruptcy
Celsius Network, one of the world’s largest cryptocurrency lenders, has filed for bankruptcy protection, a month after freezing customer assets in the wake of sharp turbulence in the crypto market that has toppled the business models of several firms.
The “necessary” decision to file for bankruptcy would provide the firm an “opportunity to stabilize its business,” it said.
Why It’s Time To Invest In Early-Stage VC
Warren Buffet often says to “buy when there’s blood in the streets and sell when there’s euphoria” and that moniker is as true today as it has ever been. We are witnessing a global correction in equity prices, driven by macroeconomic factors like inflation and geopolitical instability as well as microeconomic factors like the recent (and dramatic) declines in cryptocurrency prices. No matter where you look, it’s a scary time to deploy capital, but that’s exactly when generational opportunities are created. The public markets will likely continue to feel the pressure of inflation and rising interest rates, making equities less attractive until directional clarity is created (or provided by the Federal Reserve). Rising rates will make fixed income securities more attractive, but only marginally until inflation is curbed. Assets like real estate will likely hold their value but require significant capital expenditures and management resources.
Investment banking slowdown sparks fears of Wall Street belt-tightening
Disappointing earnings reports from JPMorgan Chase and Morgan Stanley have set the stage for a tense summer on Wall Street as bank executives grapple with whether to reduce staffing levels. A decline in investment banking fees had always been expected this year after a record haul in 2021, but bankers were still hoping for above-average performance, telling investors as recently as January that deals pipelines were healthy.
Solana’s Macalinao Brothers Launch $100M VC Fund
Solana developers Dylan and Ian Macalinao have debuted Protagonist, a $100 million venture capital firm and incubator fund. CoinDesk previously reported on the existence of the fund last month based on regulatory filings. “Our focus is mostly on emerging blockchains and technologies where we feel that we can add value within those general ecosystems or within those protocols,” angel investor and Protagonist co-founder George Bousis told CoinDesk in an interview. For its early-stage investments, Miami-based Protagonist is targeting checks between $1 million and $5 million across 20 to 30 portfolio companies. The firm also has an early opportunities strategy targeting potential high-growth companies, which will look to invest $5 million to $15 million for two to three companies, said Bousis. The fund has deployed capital to an initial group of portfolio companies, including layer 1 blockchain Aptos, Solana-based non-fungible token (NFT) protocol Cardinal and mobile banking platform Cogni.
Crypto Is Trying Out Traditional Finance’s Failures in Hyperspeed, but It’s Going to Be Fine
The last time I wrote about a stablecoin, it failed spectacularly. So when a colleague of mine suggested I write about MakerDAO’s proposal to invest in U.S. Treasurys to back its collateralized stablecoin DAI, I was reminded of the power I wield. I’m completely joking, by the way. I don’t take myself that seriously. But while we are on the topic of spectacular failure, we should talk about spectacular failure. Just two weeks ago, this newsletter suggested that opaque, intertwined platforms with excessive leverage were a danger to crypto investors. That was in the shadows of the hedge fund Three Arrows Capital’s insolvency, but now Celsius and Voyager (two retail-focused yield-generating platforms) have put together restructuring plans.
Which is what you do when you’re screwed. Voyager even declared Chapter 11 bankruptcy – the “good kind of bankruptcy,” for the record (if there’s such a thing) – proving that crypto is hell-bent on playing out the mistakes of traditional finance at hyperspeed. What’s more, Blockchain.com also stands to lose $270 million from lending to Three Arrows.
Tiger Leads Amid Shifting Lineup Of Most Active Investors
While global venture investment has fallen considerably from last year’s peak, the most active startup investors of 2021 have remained prolific dealmakers in 2022. For the first half of this year, Tiger Global Management led the pack as the spendiest lead investor in global venture and growth-stage rounds. SoftBank Vision Fund and Insight Partners nabbed second and third place, respectively. Yet while these firms continued to invest actively in the first half of this year, their total spending appears down, in some cases significantly, from the second half of 2021. For perspective, we chart out the nine highest-spending global investors, based on the value of rounds they led or co-led in H1 2022.
Shanghai included blockchain, NFTs, and Web3 in its 5-year plan
China's biggest city Shanghai officially intends to boost the development of innovations such as blockchain, nonfungible tokens (NFTs), the Metaverse, and Web3 during its next five-year plan.
On July 13, Shanghai's Municipal Government published a draft of its "14th Five-Year Plan for the Development of Shanghai's Digital Economy." The document sets its mission of "promoting the deep integration of digital technology and the real economy," with "scientists judging technology prospects" and "entrepreneurs discovering market demand." The plan suggests supporting the enterprises that plan to construct the NFT trading platforms and "research and promote the digitization of NFT and other assets." A separate section is dedicated to blockchain, with a voiced commitment to promote the development and application of "blockchain+" technology and build a blockchain development ecosystem with strong innovation capabilities and independent control.
Sequoia raising up to $9B for startups in China
Sequoia's Chinese unit is close to securing as much as $9 billion for four new VC funds, exceeding its original target of $8 billion, as the Chinese government eases its crackdown on the tech sector. The capital raise, first reported by The Information, would be the largest from Sequoia China so far. The firm is understood to be closing the fundraising, which is 50% oversubscribed, this week. Sequoia, led by founding managing partner Neil Shen, has been active in the country since 2005 and has backed Alibaba, Ant Financial, ByteDance, JD.com, and Didi Global, among others. The largest fund Sequoia China has raised to date is its yuan-denominated fund which reached a 15 billion yuan close (about $2.1 billion) in 2018. That same year it raised nearly $1.8 billion for its dollar-denominated fifth China Growth Fund, its second-biggest China vehicle. The fundraising comes just over a year after the Chinese government launched a regulatory crackdown on its tech sector that impacted giants such as Jack Ma's Ant Financial, which was forced into a restructuring, and ride-hailing company Didi Global, which delisted in the US.
Booz Allen launches $100M venture fund to invest in AI, cyber, defense
McLean management and IT consulting giant Booz Allen Hamilton have launched a venture capital unit that aims to help young companies speed the development of technologies used by the federal government. Operating as a wholly owned subsidiary of Booz Allen Hamilton (NYSE: BAH), Booz Allen Ventures LLC will invest $100 million over five years in firms developing artificial intelligence, machine learning, cybersecurity, and defense technologies, the company said. Susan Penfield, Booz Allen's chief technology officer, said that creating the venture arm was a logical next step for a company that has become "a bigger player in the technology ecosystem" over the last 10 years. The venture fund has already begun making investments, including one in April in Silicon Valley military software developer Reveal Technology Inc. That firm’s AI-enabled software platform provides military squads in high-risk environments with intelligence, surveillance, and reconnaissance information on the ground without the need for network connectivity.
Google exec suggests Instagram and TikTok are eating into Google’s core products, Search and Maps
The TikTok threat to Google’s business isn’t just limited to YouTube, as it turns out. Core Google services, including Search and Maps, are also being impacted by a growing preference for social media and videos as the first stop on younger users’ path to discovery, a Google exec acknowledged today, speaking at an industry event. Senior Vice President Prabhakar Raghavan, who runs Google’s Knowledge & Information organization, referenced the popular social apps in a broader conversation at Fortune’s Brainstorm Tech conference about the future of Google’s products and its use of AI. In a discussion about the evolution of search, he somewhat offhandedly noted that younger users were now often turning to apps like Instagram and TikTok instead of Google Search or Maps for discovery purposes. “We keep learning, over and over again, that new internet users don’t have the expectations and the mindset that we have become accustomed to.” Raghavan said, adding, “the queries they ask are completely different.”
Funding for 3D printing grows in lockstep with ambitions
Investors are rewarding a new generation of 3D printing startups that aim to disrupt industries ranging from aerospace and healthcare to housing and plant-based meat. Venture funding for these companies reached $1.5 billion in the first six months of 2022, the most of any year except 2021, when more than $2 billion was raised, according to PitchBook data. The current market for 3D-printed products remains niche, but the number of those niche applications has grown. Several recent megadeals have underscored the diversity of companies innovating in a category once defined by hobbyists. Industrial manufacturer VulcanForms raised $250 million at a more than $1 billion valuation led by D1 Capital Partners. The startup operates a pair of production facilities in Massachusetts that combine laser-based 3D printing with precision machining and other advanced manufacturing techniques to make high-end components.
Lightspeed Raises Over $7 Billion to Fund Early and Growth-Stage Entrepreneurs Around the Globe
Lightspeed Venture Partners (“Lightspeed”) today announced the closing of Lightspeed Venture Partners XIV-A/B, L.P. (“Fund XIV”) with $1.98 billion, Lightspeed Venture Partners Select V, L.P. (“Select Fund V”) with $2.26 billion, and Lightspeed Opportunity Fund II, L.P. (“Opportunity Fund II”) with $2.36 billion of committed capital. Separately, Lightspeed India Partners today announced the closing of a $500M early stage fund (“LSIP Fund IV”). Also, today marks the unveiling of Lightspeed Faction, an independent team dedicated to building on Lightspeed’s nine-year history of backing exceptional founders in blockchain infrastructure. Lightspeed’s global and multi-stage strategy supports exceptional entrepreneurs across sectors, in any geography, and at any point in their entrepreneurial journey across twelve global offices and in six countries. Since Lightspeed’s founding, the firm has partnered with more than 500 Enterprise, Consumer, Health, and Fintech founders and their companies. Roughly a fourth of those companies have either been acquired or gone public, with 33 IPOs over the years.